Workers’ power under global capitalism

Issue: 116

Ben Selwyn

Beverly J Silver, Forces of Labour: Workers$7_$ _Movements and Globalisation since 1870 (Cambridge University, 2003), £16.99

Beverly Silver has written an important, accessible and I think excellent book that contributes significantly to our understanding of workers’ bargaining power under global capitalism. Much contemporary globalisation literature ignores the position and role of labour in global politics. When labour is addressed it is usually written off in a double sense—first, as being a victim of globalisation, and, second, as having lost any of the bargaining power or agency it once had. Silver’s objective is to explain how workers, both North and South, have been incorporated into the accumulation process under modern capitalism, and how this affects their bargaining power.

By focusing on workers’ evolving position in global capitalism over the past 130 years Silver not only reincorporates what most socialists would consider the key agents of social change into globalisation debates, but also shows that so much literature, punditry and popular opinion is guilty of myopia, since capital mobility is much older than the contemporary phase of globalisation, which is often dated back to the 1970s or the period following the Second World War. The book is short, just 204 pages, but covers much ground—addressing the relationships between labour movements and capital mobility, product cycles and world politics. This review highlights some of the main issues addressed in Forces of Labour, and makes some suggestions as to how Silver’s approach may be adopted and utilised, extended and strengthened.

Silver’s method is to concentrate on patterns of struggle in key economic sectors including automobiles, textiles, semiconductors, service industries and education over a 130-year time frame. Her analysis has the strength that it is based on long term empirical evidence, which is no small feat. Long term strike data is only available for a few countries, many having large gaps in this data, for example during periods of world war and fascism in Germany, Italy and France. Moreover, non-strike forms of labour unrest, ranging from demonstrations, factory occupations and riots to slowdowns, sabotage and absenteeism, are often excluded from official statistics.

Silver therefore bases her analysis on data collected by herself and her colleagues at the World Labour Group database using information collected from the “major newspapers of the world’s two hegemonic powers—the Times (London) and the New York Times”. Silver is clear that the data collection process was not designed to produce a count of all or even most incidents of labour unrest across the globe over the past century. Rather, the research aimed to produce a measure that accurately indicates the changing levels of labour unrest over the aforementioned time frame. This methodology has the obvious strength of enabling the charting of broad trends and processes, but it is perhaps less useful for documenting the impacts of lightning localised mobilisations that come, seemingly, from out of nowhere, but nevertheless have important consequences (see below).

Silver begins by discussing how best to understand different forms of workers’ power. She adopts American Marxist Erik Olin Wright’s concepts of associational and structural power, where the former refers to power derived from workers’ collective organisation, such as trade unions and political parties, and the latter refers to power derived from workers’ location in the economic system.

Silver then subdivides the concept of structural power into marketplace bargaining power, resulting from tight labour markets, for example through workers possessing skills that are in sparse supply, and workplace bargaining power resulting from the location of workers within a key industrial sector, for example where a localised work stoppage can cause much greater impacts elsewhere in the sector and beyond. These distinctions enable a relatively nuanced approach to the understanding of the multiple points of friction between labour and capital.

One of the important contemporary debates Silver addresses is that of the so called “race to the bottom” of workers’ wages and conditions under the impact of increasingly hyper-mobile capital, both North and South. Numerous writers across the political spectrum claim that contemporary globalisation is characterised by a weakening of workers’ bargaining power because, while labour is constrained by national borders and immigration controls, capital flows freely across borders, often at the touch of a button. Under these circumstances capital can merely relocate production to regions that guarantee cheaper labour and less demanding social conditions.

The growing power of capital, it is held, forces nation states to attempt to undercut each other by sacrificing workers’ pay and conditions in order to attract capital. Silver’s response to these claims is to look at data on foreign direct investment (FDI) flows to show that the majority of FDI is concentrated within and between high wage countries. For example, in 1999 over 75 percent of FDI flowed between high-income countries, indicating that capital is heavily reliant on services provided by developed states and, critically, skilled workers. This means that especially productive (as opposed to financial) capital is relatively limited in its global scope.

Another version of the race to the bottom thesis is that capital can use the threat of exit to persuade national governments to downgrade workers’ standards and regulations in its favour. Capital hyper-mobility is said to undermine state sovereignty, which in turn is the basic guarantor of workers’ rights and conditions. This argument rests on an understanding of the state derived from social contract theory, where it is held, to a greater or lesser extent, to guarantee the freedoms associated with political and economic stability for its population.

Any serious Marxist approach would begin by noting that, while the state obviously provides a range of collective goods for its population (such as infrastructure, health services, and spending on research and development), its role is bound up with the reproduction of class relations. Under these circumstances positing the state as guarantor of workers’ benefits is rather like positing the jailer as guarantor of whatever limited rights prisoners enjoy. The key to understanding workers’ conditions is not state sovereignty, but workers’ struggles.

Here Silver uses a historical political economy approach to counter the race to the bottom thesis. She notes that an important determinant of capital’s investment strategy is workers’ militancy, and proposes that rising levels of class struggle and gains made by workers may push capital to relocate into regions with less history of workers’ militancy.

However, relocation is not regarded by Silver as a long term solution to capital’s attempts at evading class struggles. Rather she adopts David Harvey’s concept of a spatio-temporal shift to highlight how, while relocation might serve capital’s objectives of reducing workers’ influence over the production process and wages and conditions, it does so only on a short term basis. Eventually it leads to a relocation of class struggle in new geographical regions. In other words, when capital relocates so too does class struggle.

She examines the extent to which this process has taken place and its impact on workers’ struggles in the auto manufacture sector. Up to the 1930s auto production for the world market was heavily concentrated in North America. Silver documents how, with rising class struggle in auto production, in particular in areas such as Flint, Michigan, auto capital began relocating, first to Western Europe in the 1950s and 1960s, and then in the 1970s and 1980s to so called Newly Industrialising Countries (NICs)—in particular Brazil, South Africa and South Korea. Much globalisation literature would point to this as evidence of capital’s ability to geographically relocate in ways favourable to itself.

However, Silver shows that while initially levels of class struggle were relatively low in new regions of auto production, they soon converged to the levels found in North America at the time when capital began to relocate. She notes how auto workers’ struggles in Italy and France in the 1960s and 1970s were central to 1968, and subsequent movements for radical political and economic change.

Even more interesting is the case of auto production in the NICs mentioned above. In the 1970s and 1980s Brazil, South Africa and South Korea experienced high rates of unemployment and relatively weak welfare states, and were effectively ruled by dictatorships. Under these conditions workers faced much greater difficulties in mobilising against capital, and much higher risks and costs of redundancy than in the advanced capitalist countries. However, in each of these cases, high levels of auto investment gave rise to large and militant working classes. Indeed, in each case, auto workers’ struggles were central to broader political movements for democratisation and improvements in workers’ pay and conditions. For example, from 1985-9 in São Paulo, the centre of auto production in Brazil, and despite rising unemployment and government implemented IMF stabilisation programmes, real industrial wages rose by an average of 10 percent a year.

Silver explains how auto workers’ workplace bargaining power derived from their position in the production process. In auto production factories are subdivided into workshops, each producing components which are immediately assembled in order to minimise production time and storage costs. If production of a single component is disrupted, production throughout the factory comes to a standstill. In this way, small groups of workers in single workshops can disrupt not only production elsewhere in the factory, but also production in factories supplying inputs across the country and beyond.

There is much more to this book than the subjects touched upon, but there are also some areas that could be expanded. First, there is not a great deal about trade union strategies, or what Silver calls “associational power” here. It would be interesting to read about the extent to which trade unions understand their structural power in ways analysed by Silver, and whether they utilise this understanding when planning and engaging in strike action and bargaining with employers.

Second, there is little about political parties and wider issues of politics from below, and the ways in which they feed into and are influenced by workers’ struggles. Here Silver would benefit from engaging with the analysis of political and economic upturns and downturns as developed by the Socialist Workers Party over the past three decades. In short, Forces of Labour is valuable as a resource in the classroom and in discussions about the relationship between globalisation and labour. However, it is potentially even more valuable for trade union members as a tool for conceptualising and understanding sources of their bargaining power with managers.